Know your business model before starting your plan.
Updated: Aug 12
Starting a business plan before you are crystal clear on your business model is a waste of time. The business plan is supposed to provide detailed procedural and financial information about how you will implement your business model in the markets you are pursuing. If you don't know the model inside out the business plan will change over and over in response to new discoveries you make about what your model really is.
Make sure you are solving a problem people care about
Arguably the most important steps in determining your business model, is very clearly defining the problem or problems your business solves and who it solves them for. Second to that is making sure the problem you solve is something people will pay to resolve. If they wont pay for it directly, can they lead you to someone else pay you for it? If they wont pay for it stop now and regroup; going forward will most likely be a waste of time & money until you can figure this part out.
Get very specific, then back out till your value proposition isn't as strong:
In the process of clearly defining the problem you solve and if people will pay to have it solved you will come up with (hopefully) multiple value propositions. Determining your core value propositions is a big part of determining your model. As you do customer discovery and validate your value props, start with a very clear value proposition that definitely solves a real problem people will pay for it, even if it is only for a small group; then widen your perspective and the potential members of other groups that share the same problem until the value you provide to the group is less strong. Then go back a step to where the value remains strong and you have the core of your business model. Flesh out the rest of that model without compromising value before you start writing your business plan.